Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Usain]

I'm tired of the media saying Tesla started a price war. That is BS.

We are seeing another advantage Tesla has that I don't hear discussed much in the community. Because Tesla sells direct to the consumer and takes all orders online, Tesla knows its demand at any given instant for any specific locale. This allows them to adjust price and supply anywhere in the world in an immediate reaction to demand fluctuation. No other major automaker can do that so efficiently.

There is no price war. Tesla is simply adjusting its prices to maximize profit on its increased production capacity. Why? Because they can.

 

[Right_Said_Fred]

Now tell me again, ELI5, why is it relevant?

The market seems to think it is. Just the short-term traders though.

 

[traxila]

Just wait until the big boys get rolling.

Ford Says It Will Lose $3 Billion on EVs This Year as It Touts Startup Mentality

The auto maker says it wants to give investors more visibility into the performance of its three business units.

www.wsj.com

 

[hobbes]

Useful forecast is one that DOES NOT NEED TO CHANGE when new data becomes available.
Because that new data does not conflict with that forecast.
This is a definition of forecast.

Forecasts that need to be changed when new data shows up, are shitty forecasts.
Worse than useless.

So why do you even bother to read here? Make a forecast for share price given what you know today and a strategy on when you´ll sell and buy TSLA for the rest of your life now. Will safe you a lot of work... LOL, sorry you can´t be serious..

Obviously, the better the forecast, the less you have to change it. If one forecaster has better data or a better model to extrapolate from that data that forecast has to be changed less. But there is a limit to that - if you are using all the data you can get at a certain time and new info becomes available, it makes absolutely no sense to not use it. While it shows your previously forecasted number was wrong, that might still have been the best forecast you could make at the time.

Back to the weather forecast example I used - would you rather have a forecast only for the next day, because the forecast for a few days ahead is not very good? Or would rather only have the forecast for a week ahead never be changed?

 

[Usain]

Just wait until the big boys get rolling.

Ford Says It Will Lose $3 Billion on EVs This Year as It Touts Startup Mentality

The auto maker says it wants to give investors more visibility into the performance of its three business units.

www.wsj.com

OMG

Great quote from the article:

Ford finance chief John Lawler described the EV division as a startup inside the 119-year-old company, and said it is normal for a fledgling business to rack up losses.

Have you ever heard of a startup that suffers $3 billion of losses in one year?

 

[FEERSUMENDJIN]

Tesla inventory in UK is handily undercutting all VW lines. Historic low prices. A model white LR Model Y can be purchased from £40K (ID 4 starts at 44K). Model 3 can be purchased from £38K which is the same price as the most under specced ID3. Hyundai/Kia in same position (apart from the evergreen Kona). There will be blood.

 

[theschnell]

I'm tired of the media saying Tesla started a price war. That is BS.

We are seeing another advantage Tesla has that I don't hear discussed much in the community. Because Tesla sells direct to the consumer and takes all orders online, Tesla knows its demand at any given instant for any specific locale. This allows them to adjust price and supply anywhere in the world in an immediate reaction to demand fluctuation. No other major automaker can do that so efficiently.

There is no price war. Tesla is simply adjusting its prices to maximize profit on its increased production capacity. Why? Because they can.

You are absolutely correct that a price war is an incorrect label, in that it implies that the competition was eating Tesla’s lunch, whereas in reality increased production by Tesla and a massive increase in interest rates were the primary factors driving Tesla’s price reductions.

They were in a price war primarily against the Fed, not competitors.

 

[Usain]

Just wait until the big boys get rolling.

Ford Says It Will Lose $3 Billion on EVs This Year as It Touts Startup Mentality

The auto maker says it wants to give investors more visibility into the performance of its three business units.

www.wsj.com

Also, there is this:

Ford said it is on target to reach an annualized production rate of 2 million electric vehicles by the end of 2026.

Instead of Ford sounding bullish, this sounds (Mary) Barra-ish.

 

[theschnell]

Also, there is this:

Instead of Ford sounding bullish, this sounds (Mary) Barra-ish.

The numbers always get bigger but also another year out lol

Edit: But I do think Ford has the best strategy of Legacy, if they can survive the valley of EV production hell.

 

[Matt Porter]

[...]

We are seeing another advantage Tesla has that I don't hear discussed much in the community. Because Tesla sells direct to the consumer and takes all orders online, Tesla knows its demand at any given instant for any specific locale. This allows them to adjust price and supply anywhere in the world in an immediate reaction to demand fluctuation. No other major automaker can do that so efficiently.

[...]

Exactly. Other OEMs are only starting to adjust now, as they receive their delayed feedback from the dealerships that their lots are full, so the next month's order will be less. Since their feedback cycle is faster, Tesla can simply update pricing to more quickly match the demand they see.

On the other hand, dealerships do have the ability to adjust pricing more on the fly, even for each customer that comes in. They'll just have to reduce those dealer markups a bit (cry me a river).

 

[Chocochip]

Tesla inventory in UK is handily undercutting all VW lines. Historic low prices. A model white LR Model Y can be purchased from £40K (ID 4 starts at 44K). Model 3 can be purchased from £38K which is the same price as the most under specced ID3. Hyundai/Kia in same position (apart from the evergreen Kona). There will be blood.

Sorry... where exactly do you see LR Model Ys at £40k?

The LR Model Ys in inventory start (in white) at £48,770 (£5.3k off), and the SR Model Ys start at £42,350 (£2.6k off)
Tesla inventory of new white LR Model Ys

Indeed, the Model 3 discounts are deeper: the SR-RWDs in inventory start (in white) at £38,790 (£4.2k off), while the LR-AWDs start at £45,990 (£5k off)
Tesla inventory of new white LR Model 3s

These discounts just popped up today AFAIK, so they only affect the last week of deliveries of those specific variants. Yes, I suspect UK sales will not be brilliant this Q, but Tesla is still making money on these sales -- check the prices for these cars in China.

Edited to add: if Troy is right -- and I suspect he's in the correct ballpark -- Q1-23 sales in the UK will be roughly even to the Q1-22 numbers and down significantly compared to Q4-22. I suspect it's a whole auto market trend, though.

2023 Shipping Movements

Tuesday 21 Mar 23 SUMMARY DREAM ORCHID has arrived alongside the ICO terminal in Zeebrugge. She is highly likely to be carrying some Teslas. HOEGH OSAKA Has arrived in Rotterdam. Has 760 MS and 664 MX onboard from Baltimore which are being unloaded in Rotterdam. HOEGH BANGKOK ETA Zeebrugge 30...

teslamotorsclub.com

 

[scaesare]

Useful forecast is one that DOES NOT NEED TO CHANGE when new data becomes available.
Because that new data does not conflict with that forecast.
This is a definition of forecast.

Forecasts that need to be changed when new data shows up, are shitty forecasts.
Worse than useless.

I'm not going to get involved in the Troy debate, that seems to get raised every quarter... I really don't care about his numbers that much.

But this seems like an odd thing to say. If a forecast doesn't need to change, then... isn't it really "history written in advance"? As far as I know, nobody here yet has that kind of prescience. The other option is to make it unspecific enough that it doesn't need to change despite whatever new developments arise, but that doesn't seem terribly useful.

Now you did caveat it with the phrase "Useful forecast"... so I suppose you can simply say that all the folks that need to revise their forecast over time haven't provided useful forecasts. But that would indicate that any revision means the original forecast wasn't useful... even ones that improve accuracy in the same direction. Seems to me that a forecast that's 99% accurate isn't unuseful simply because it was revised halfway through the period to be 99.5% accurate.

I find lots of forecasts useful, despite needing revision: weather, estimated taxes, package arrival dates, length of time it would take my wife to get ready....

 

[wtlloyd]

The Troy Teslike discussion IS tiresome.

Let's change the description from "forecast" to "reporting". Troy is updating his "reporting" as new information comes in. "Based on current information, the projected quarter should end up this.

There, wasn't that easy? FIFY.

 

[WarpedOne]

If a forecast doesn't need to change, then... isn't it really "history written in advance"?

Whatever you want to call it ... an accurate model produces accurate predictions.
An accurate prediction needs no 'adapting to new data', as it was accurate from the start.
Correct and useful.

Forecast that need adaptations were inaccurate, made with inaccurate models.
Wrong and useless.

 

[oldTAVguy]

Ford CFO justifies the 2B 2022 loss ... (warning CNBS)

Ford CFO on its EV business losing $2 billion in 2022

Ford CFO John Lawler joins 'Squawk Box' to discuss when Ford's electric vehicle business will become profitable, how Lawler would counter those who disagree with Ford's growth strategy, and more.

www.cnbc.com

 

[Nocturnal]

 

[Max Plaid]

OMG

Great quote from the article:


Have you ever heard of a startup that suffers $3 billion of losses in one year?

Rivian?

 

[Drax7]

Whatever you want to call it ... an accurate model produces accurate predictions.
An accurate prediction needs no 'adapting to new data', as it was accurate from the start.
Correct and useful.

Forecast that need adaptations were inaccurate, made with inaccurate models.
Wrong and useless.

Accurate models, who are you kidding .

 

[Usain]

Rivian?

Maybe. But Rivian was founded 14 years ago. It's hard to call them a startup.

 

[M|S|M MYP]

Ford CFO justifies the 2B 2022 loss ... (warning CNBS)

Ford CFO on its EV business losing $2 billion in 2022

Ford CFO John Lawler joins 'Squawk Box' to discuss when Ford's electric vehicle business will become profitable, how Lawler would counter those who disagree with Ford's growth strategy, and more.

www.cnbc.com

If they had announced a 4B loss, their stock would be trading even higher today